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Brief Exercises BE3-6, BE3-8 Exercise: E3-7
BE3-6 Trek Company has the following production data for April: units transferred out 40,000,
and ending work in process 5,000 units that are 100% completed for materials and 40% complete
for conversion costs. If unit materials cost is $4 and unit conversion cost is $7, determine the
costs to be assigned to the units transferred out and the units in ending work in process.
BE3-8 Data for Cascio Company are given in BE3-7. Production records indicate that 18,000
units were transferred out, and 2,000 units in ending work in process were 50% complete as to
conversion cost and 100% complete as to materials. Prepare a cost reconciliation schedule.
Information from BE3-7 Materials $16,000, labor $29,500, overhead $18,000Equivalent units of
production are materials 20,000 and conversion costs 19,000.
E3-7 The Sanding Department of Richards Furniture Company has the following production and
manufacturing cost data for March 2014, the first month of operation.
Production: 9,000 units finished and transferred out; 3,000 units started that are 100%
complete as to materials and 20% complete as to conversion costs.
Manufacturing costs: Materials $33,000; labor $24,000; overhead $36,000.
Prepare a production cost report
Brief Exercises BE4-2, BE4-8 Exercise: E4-10
BE4-2 Finney Inc. has conducted an analysis of overhead costs related to one of its product lines
using a traditional costing system (volume-based) and an activity-based costing system. Here are
Explain how a difference in the overhead costs between the two systems may have
BE4-8 Rich Novelty Company identified the following activities in its production and support
operations. Classify each of these activities as either value-added or non-value-added.
(a) Machine setup.
(d) Moving work in process.
(b) Design engineering.
(e) Inspecting and testing.
(c) Storing inventory.
(f) Painting and packing
E4-10 Wilmington, Inc. manufactures five models of kitchen appliances at its Mesa plant. The
company is installing activity-based costing and has identified the following activities performed
at its Mesa plant.
1. Designing new models.
2. Purchasing raw materials and parts.
3. Storing and managing inventory.
4. Receiving and inspecting raw materials and parts.
5. Interviewing and hiring new personnel.
6. Machine forming sheet steel into appliance parts.
7. Manually assembling parts into appliances.
8. Training all employees of the company.
9. Insuring all tangible fixed assets.
10. Supervising production.
11. Maintaining and repairing machinery and equipment.
12. Painting and packaging finished appliances.
Having analyzed its Mesa plant operations for purposes of installing activity-based costing,
Wilmington, Inc. identified its activity cost centers. It now needs to identify relevant activity cost
drivers in order to assign overhead costs to its products.
Using the activities listed above, identify for each activity one or more cost drivers that
might be used to assign overhead to Wilmingtons five products.
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